Debit versus Credit (Accounting Acronyms)

Accounting Acronyms

In accounting we often use abbreviations or acronyms. For example, GAAP (Generally Accepted Accounting Principles), AICPA (American Institute of Certified Public Accountants), etc. In addition, we oftentimes see abbreviations for debit and credit. We use dr for debit and cr for credit.

Debits

Debits are used to increase assets and decrease liabilities and owners' equity. In accounting, we use "dr" to represent debits. This doesn't really make sense to most first time accounting students as there is no "r" in the word debit. The abbreviation for debit, dr, is taken from the latin and italian root of debit that is over 500 years old; it stands for debit record.

Credits

Credits are used to increase liabilities and owners' equity and decrease assets. In accounting, we use "cr" to represent credits.

Normal Account Balances

The "normal balance" of an account is determined by how the account increases. Therefore, if an account increases with debits, that account carries a normal debit balance (i.e. cash increases with debits and has a normal debit balance).

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Dear Brian,I'm an MBA student, and my background is so far from Management. I find accounting so so difficult but your videos are helping a lot. but still I'm so not getting the debits and credits thing along with the T accounts and ledger. i guess i need time and practice. If you could refer me to more basic information i would really appreciate your help. thank you

There are many people in your same situation. I have multiple videos that will walk you through the debit/credit process as well as t-accounts. Check out my "videos" page under the FINANCIAL ACCOUNTING section. I hope to have many more videos up soon. Please let me know if I can be of any other service.

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